After the holiday, textile companies started operations one after another, and cotton prices rose rapidly. However, downstream yarn prices rose significantly slower than cotton, and companies faced greater cost pressure. As the time for cotton reserve rotation is approaching, many textile companies hope to reduce costs by purchasing reserve cotton. Is this a huge opportunity or risk for textile companies to bet on reserve cotton?
At present, domestic textile companies have expressed their hope that the cotton reserves will be rotated out as soon as possible to alleviate the current urgent need to rise in cotton prices. In mid-February, the sales price of “Double 29” and “Double 30” hand-picked cotton from Northern Xinjiang in Hebei was around 16,900 yuan/ton, and due to the limited supply, dealers required cash settlement and no credit was allowed. Some companies said that at present, the raw material price of carded 40S cotton yarn is 17,000 yuan/ton, and the converted cotton yarn cost is about 24,300 yuan/ton, while the price of 40S is 24,400 yuan/ton-24,500 yuan/ton, and the yarn profit has been compressed to 100 yuan/ton- 200 yuan/ton. If cotton prices continue to rise, the risk of corporate losses will increase.
In terms of cost, of course the opportunities outweigh the risks. The reserve cotton reserve price in 2016 is around 13,000 yuan/ton, and the price after excluding discounts is around 11,000 yuan/ton. Some reserve cottons with poor indicators even have prices below 11,000 yuan/ton after discounts. Among them, the color will be the most It’s awesome, but it doesn’t hinder the company’s normal production and use. In fact, for textile enterprises, the influence of color indicators is far less than that of cotton length and horse value. 2017 is no exception, especially when the price of commercial cotton rises rapidly, the price of cotton reserves stored for many years becomes even more attractive.
According to surveys, cotton stocks of small and medium-sized textile enterprises in Hebei can support use until March. As the time for the cotton reserves to be rolled out is approaching, local textile companies are already preparing to bid for the cotton reserves.
A textile company in Baoding said that since the company mainly spins medium and low-count combed yarn, and mainly for its own weaving, it has no special requirements for reserve cotton indicators. The reserve cotton auctioned in 2016 can basically meet the needs of the company. We plan to actively participate in the rotation of cotton reserves in the next step. It is understood that the enterprise has a scale of 50,000 yarn spindles and 700 employees. Now it has 30,000 spindles in operation and uses about 300 tons of cotton per month. Its products are mainly 21-count, 32-count, and 36-count combed yarns. In addition, the company has 800 looms (fabrics are used for home textiles), and its products are mainly sold to Jiangsu and Zhejiang.
Other local companies said that they were basically satisfied with the reserve cotton auctioned in 2016, especially in terms of weight. However, the short staple rate was relatively high, generally between 16-20%. Exceeding 20% would have a greater impact on spinning. Since the reserve cotton is cost-effective, it can still meet the company’s product requirements after cotton distribution. The company’s products are mainly 21-count, 26-count, 32-count, 34-count, and 40-count carded yarns. The monthly cotton consumption is 800 tons, and the number of workers per 10,000 spindles is 60-70. 1/3 of the cotton yarn is used by itself, and 2/3 is sold. Go to Jiangsu.
Some companies also said that relying entirely on reserved cotton for inventory would have certain risks. For example, this year, almost all textile companies are waiting to bid for cotton reserves. The situation of more than enough is to raise the price of cotton reserves; secondly, it will take at least a week from auction to delivery of cotton reserves. If there are special circumstances, raw materials The time to arrive at the factory will be delayed, and the company faces the risk of insufficient raw materials. In addition, the early bidding for reserve cotton is fierce, and whether you can bid for it is also a risk. Taking a variety of factors into account, early bets on cotton reserves involve both risks and opportunities. How to manage inventory well is very important.
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